Ultra-nationalist resurgence could complicate Serbia's EU path

JAGODINA, Serbia (Reuters) - Ultra-nationalists are set to return to Serbia’s parliament in an April 24 election after an absence of several years, boosted by growing discontent with Prime Minister Aleksandar Vucic’s pro-European Union stance and austerity policies.

A supporter of Radical Party leader Vojislav Seselj lights a flare before Seselj's pre-election rally in Jagodina, Serbia April 12, 2016. REUTERS/Marko Djurica

They include firebrand Radical Party leader Vojislav Seselj, whose popularity in Serbia was boosted by his acquittal last month of crimes against humanity by the U.N. war crimes tribunal in The Hague.

Polls indicate Seselj’s Radicals and the right-wing Dveri grouping, which hold pro-Russian and anti-NATO views and demand an end to integration with the EU, will both get over the threshold needed to get into parliament and together could win about 25-30 seats in the 250-seat assembly.

While the ultra-nationalists are unlikely to challenge the prime minister’s strong hold on power, they will use the platform to attack his pro-EU course and fight any concessions he is forced to make during Serbia’s negotiations to join the bloc, which began in December.

Opinion polls suggest Vucic’s Progressive Party is on track to retain its parliamentary majority, but Seselj’s Radicals -- who failed to win any seats in elections in 2012 and 2014 -- could become the third-largest group in parliament.

Seselj, whose war crimes acquittal is being appealed by prosecutors, gives voice to the grievances many Serbs feel over NATO’s 1999 bombing of Serbia over the Kosovo conflict. Seselj was deputy prime minister at the time.

“The EU is made up of NATO countries. They bombed us, they took Kosovo away from us,” he told cheering supporters last week in Jagodina, a central town where unemployment runs at 30 percent.

Seselj, 61, was a mentor to Vucic until 2008 when his protege broke with the Radicals.

Seselj, who has been battling colon cancer for several years, remains a fierce advocate of the “Greater Serbia” ideology that fueled bloodshed in the 1990s Yugoslav wars.

His goal is to secure enough members of parliament -- one third or 84 legislators -- to block any attempt to change Serbia’s constitution if Belgrade comes under pressure during the EU negotiations to remove a constitutional reference to Kosovo being part of Serbia.

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A sharp 2014 recession sent Serbia’s budget deficit soaring, forcing the government to seek a 1.2 billion euro ($1.35 billion) loan from the International Monetary Fund, which demanded public spending and subsidy cuts, tax hikes and the privatization of inefficient state firms as a condition.

EU membership will also require painful economic restructuring.

Analysts say austerity measures and an unemployment rate of 18 percent have pushed voters towards the rightist parties.

Until two years ago, Suzana Arsic, a 52-year-old kindergarten teacher from Jagodina, voted for the pro-EU Democratic Party, but now she is changing sides.

“I’m going to vote for the Radicals this time. I didn’t like what I saw -- plants were shut down, people lost their jobs and were pushed to expensive borrowing they couldn’t manage,” she told Reuters.

Serbia’s economy is set to grow 1.8 percent this year, slower than its neighbors, the World Bank says. The average monthly wage of 357 euros is among the lowest in the region.

Many Serbs see little benefit from the country’s talks on joining the EU. A recent opinion poll found nearly 72 percent of Serbs oppose joining the EU and NATO.

Vucic says joining the EU, Serbia’s biggest trading partner and investor, remains Belgrade’s No. 1 policy goal. The conservative leader is going to the polls two years early to seek a mandate for economic reforms needed to qualify for EU membership.

Vucic, who says Serbia will not seek to join NATO, warns of the dangers of rising nationalism. “There can be no compromise with those who are pushing Serbia back in the past,” he said.

The ultra-nationalist resurgence is not causing great alarm in the EU for now because Vucic has ruled out a coalition with the right-wingers, diplomats say.

Hrvoje Stojic, a Zagreb-based analyst with Hypo Group Alpe Adria bank, said the strengthening of rightist parties was a regional trend, noting eurosceptic parties are in power in Poland and Hungary.

Both the Radicals and Dveri, running in coalition with the Democratic Party of Serbia (DSS), pledge to halt privatizations, subsidize farmers and impose import duties to protect domestic producers.

“If people look in their wallets, if they open their eyes and switch off their TV sets they’ll realize that they’re being fooled (by the current government),” Sanda Raskovic Ivic, head of the DSS party, told Reuters, referring to Vucic’s promises of improving living standards.

Many nationalist voters are not elderly Serbs nostalgic for the old Yugoslavia, but young people who remember little of the wars that accompanied Yugoslavia’s break-up.

“Vucic has lost ‎his credibility ... He made us slaves to capitalists and that’s why I will vote for Dveri,” said Dejana Simic, a 23-year-old waitress from Belgrade.

Many Serbs, however, accept that Serbia has no option but to seek close ties with the EU.

“There’s really no alternative to the EU,” said Djordje Trifunovic, 22, a Belgrade law student.

($1 = 0.8879 euros)

Additional reporting by Aleksandar Vasovic; Editing by Adrian Croft and Helen Popper